Facebook Marketing Forum

After its four-month test, Facebook has decided that whatever form its entry into the “local deals” market takes, it won’t look like Facebook Deals, which will be shuttered in the coming weeks.

Deals sites, in which businesses tip money into the pockets of middlemen so they can offer notional discounts for Brazilian waxes, are the engine-room of the current dotcom bubble. Facebook’s market test took place in Atlanta, Austin, Dallas, San Diego and San Francisco.

Facebook Deals was touted as a competitor to Groupon and LivingSocial, and as well as flogging offers secured by its own sales team, it added an extra layer of middleman into the deals business by on-selling offers set up by companies like ReachLocal, Gilt City and Zozi.

I'm actually not surprised by this. I think it was a problem with both implementation of the program (they did not reach out enough to local businesses), and the fact that some of the offers were not on topic.